Tax & Accounting News

Relying on Helplines is Not Enough

14/05/2009

Small traders are being urged to seek professional tax advice rather than relying on HM Revenue and Customs’ helplines, following a recent court ruling.

In a recent court case a man was ordered to pay up £300,000 of VAT he thought wasn’t due after getting inaccurate advice from the HMRC’s VAT and Excise helpline
 
The defendant in Corteck v HMRC had relied on the information he received from the VAT and Excise helpline rather than seeking professional tax advice, but the fact that the incorrect advice he was given was wrong was no defence, the court found.

“The [helpline] was only held out as a source of ‘general advice’, rather than as a source of binding rulings on the proper tax treatment of specific transactions,” the Judge found.

“[The taxpayer] could not reasonably have thought that [HMRC] had given him a fully considered and binding ruling in [his] favour.”

The ruling highlights the need for proper, professional tax advice, which could work out more cost-effective in the long run.